Milestone Unveils Reorganization, New Strategy at MIPS

Milestone Systems spent the past year evaluating its business model and discovered wholesale change was needed in order to secure its position in the marketplace as a leading provider of open video management system platforms.

Security Resource

LAS VEGAS — Milestone Systems spent the past year evaluating its business model and discovered wholesale change was needed in order to secure its position in the marketplace as a leading provider of open video management system platforms.

The fruits of a painstaking reorganization were unveiled Monday during the Milestone Integration Platform Symposium (MIPS), a two-day learning and networking affair held at the swanky hotel-casino Cosmopolitan of Las Vegas.

During his keynote address to nearly 400 attendees, Milestone CEO Lars Thinggaard laid out the rationale behind a restructuring that has shifted the company from its outdated “one size fits all approach” to a go-to-market strategy based on a wholly new segmentation model.

A key factor in Milestone’s research efforts was engaging “our ecosystem,” Thinggaard said, referring to the company’s system integration partners and other resellers.

“We asked you, what do you think would make sense for us to change to be better at serving the purposes of our end customers? You gave us the feedback. We didn’t always like what we heard but that is fine. We consolidated this information and made changes to the company,” he said.

In short, it was Milestone’s partners that urged the company to abandon its former business model, which oversimplified the market as: low-end, 1-16 cameras; mid-market, 17 to 100 cameras; high-end, 100+ cameras. The newly segmented Milestone was introduced by Thinggaard as three new discrete business units:

Professional Products — serving the Small and Medium Business (SMB) market, focusing on ease of installation and ease of use.

Incubation and Ventures — with offices in the Silicon Valley and Denmark, the unit is charged with promoting innovation and accelerating growth with other technology partners.

“We tuned in to customers’ real needs in order to get down to the pain points … in the segmentation model. What are customers asking for? Now we know a lot more than we did a year ago. We acted on your input and changed the company based on that. We have been using you as strategy consultants, and thank you for that,” Thinggaard said.

The leaders of the new business units were introduced on stage, including vice presidents Janne Jakobsen (professional products), Bjorn Skou Eilertsen (corporate products) and Lars Nordenlund (incubation).

Nordenlund said he and his team members in the incubation office — which Milestone bills as an industry first for a VMS provider in the Silicon Valley — will focus on a core mission of accelerating the transition from analog to IP.

“We are going to do that by identifying new areas of business for the whole industry, the ecosystem, where maybe the VMS core business as we know from Milestone today, is not fitting that well,” he said. “One of these examples where we can accelerate this is the lower end on the appliance NVR business. That is one of the things we are looking at right now. How can we build our next generation of that offering that we already have in the market but we think we should be much stronger in that part?”

Nordenlund provoked curiosity as he made vague reference to “a very exciting project” that aims to strengthen the company’s position in the lower end of the market that will be supported by its technology partners. Plus, he added, “We will be thinking about how do we utilize opportunities in the cloud space. How do we bring them in together with the rest of our portfolio of products, new offerings, but maybe even standalone offerings, again, involving you as the extended ecosystem of Milestone.”

Eric Fullerton, Milestone’s chief sales and marketing officer, later addressed the gathering to delve deeper into the company’s execution and operational plans to implement the new strategy. He explained while studying feedback from its partners, it was obvious the company had much room to improve in the way it was servicing the needs of end users under the former business model.

“We couldn’t explain to our developers what to develop and we couldn’t explain to our customers what it is we were trying to get into our models. That’s why during our strategy work we figured out we were going to have one axis that had low and high complexity,” he said.

Milestone’s new segmented strategy will allow the company to better serve the diversity of end users that can exist even at, say, a single campus setting with multiple sites that require varying degrees of complexity in its systems.

“What we figured was that this market is going to develop across the board in this segmentation model. If we really want to do what we set out to do with our strategy, we have to focus on the whole market. That is why we then made the decision to build the organization the way that Lars describes,” Fullerton said.

Upon devising its new model, the company set out to develop a higher level of abstraction from all the information it had gathered after studying the individual segments. “The four major pain points that we synthesized to were simplicity, flexibility, scalability and reliability,” Fullerton said.

Milestone recognized the higher end of the market has been relatively successful in adopting IP convergence along with more complex systems and features sets, while the lower end of the market continues to lag. Hence, the emphasis on simplicity where needed. “Going forward we will be focusing on making it very easy to use our products … and help drive the convergence of this part of the analog market,” he said.

To achieve flexibility, Fullerton explained, means everything invented in the future will be able to be integrated into the Milestone open platform. While discussing scalability, he announced a new product offering, XProtect Expert, would be added between the Enterprise and Corporate platforms, enabling integrators to offer “a more affordable way of applying IT management platforms at the mid to higher markets.”

Also soon to be released, Milestone Interconnect, a product module that allows for remote management of VMS platforms and video streaming. “We believe strongly this is going to enable a lot of managed services and it is going to be a frontrunner for what the cloud will eventually become,” Fullerton said.

Thinggaard and Fullerton both stressed their belief the new segmentation model is likely to trailblaze a new path for other companies in the space as well.

“We really think we have had some big thoughts here and a lot of other people are going to have to follow suit and begin looking at the market differently than just at the number of cameras,” Fullerton said.

About the Author

Rodney Bosch
Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.Contact Rodney Bosch: rbosch@ehpub.com